Chapter 20 - Auto Insurance

Part B: Medical Payments Coverage

Insuring Agreement
  • Will pay insured’s reasonable medical and funeral expenses within 3 years of the accident.
  • Coverage limits usually range from $1,000 to $10,000.
  • The coverage is not based on fault.
Insured Persons
  • Named Insured and Family Members:
    • Coverage applies in any auto or while struck as a pedestrian by a motor vehicle designed for road use.
  • Others Occupying a Covered Auto:
    • Includes individuals in the vehicle that falls under the policy coverage.
Exclusions
  • The following vehicles or situations are excluded from coverage:
    • Fewer than Four Wheels
    • Vehicle Used as Residence
    • Vehicle Available for Regular Use
    • Vehicle Used in Insured's Business
    • Racing Vehicle
    • Public/Livery Conveyance
    • Bodily Injury (BI) as an Employee
    • Vehicle Used Without Permission
    • Nuclear Weapon, Radiation, or War
    • Part of Vehicle Sharing Program
    • Vehicles Designed for Flight.
Other Insurance
  • For an Owned Vehicle:
    • Coverage is on a pro-rata basis.
  • For a Non-Owned Vehicle:
    • Coverage under Personal Auto Policy (PAP) is excess to the policy covering a non-owned vehicle.

Part C: Uninsured Motorists Coverage

Insuring Agreement
  • This coverage pays compensatory damages related to bodily injury (BI) that the insured is legally entitled to recover from an uninsured driver who is at fault.
  • Coverage is subject to limits displayed on the declaration page and does not include a deductible.
  • Coverage may be subject to Arbitration.
  • In some states, it may also include property damage (PD) coverage.
Insured Persons
  • Named Insured and Family Members:
    • Coverage includes the insured and family members.
  • Any person in a covered auto.
  • Any person entitled to recover damages associated with one of the above individuals.
    • Example: A spouse of someone who was killed could be entitled to claim.
Uninsured Vehicles
  • Four types of uninsured vehicles are defined:
    • Vehicle with no BI liability insurance.
    • Vehicle with BI coverage below the insured’s state-required minimum amount.
    • Hit-and-Run Vehicle:
    • A vehicle involved in an accident where the driver flees the scene.
    • Vehicle has BI coverage, but the insurer denies coverage or becomes insolvent.
Exclusions
  • The following situations are generally excluded from uninsured motorists coverage:
    • No Uninsured Coverage
    • Settling a Claim Without Insurer's Consent
    • Vehicle Used Without Permission
    • No Punitive Damages available
    • Primary Coverage Elsewhere
    • Public/Livery Conveyance
    • Workers' Compensation Insurer (as coverage).
Other Insurance
  • Maximum coverage amount paid equals the highest limit of coverage among policies.
    • Example: If a pedestrian is hit by an uninsured motorist, this coverage applies as an excess over a non-owned auto policy.
    • A pro-rata basis applies when:
    • Both policies provide primary coverage.
    • Both policies provide excess coverage.
Underinsured Motorists Coverage
  • This coverage compensates the insured when their actual damages exceed the limits of the negligent driver.
  • The maximum amount paid equals:
    extUnderinsuredLimitextNegligentDriversLimitext{Underinsured Limit} - ext{Negligent Driver’s Limit}
  • This ensures that the insured receives adequate compensation when other drivers are under-insured.